The Bangalore Income Tax Appellate Tribunal (ITAT)has recently while allowing the deduction claim of assessee held that condonation of application was not required when the delay were condoned by Central Board Direct Tax circular
Assessee Mulki Sunder Ram Shetty is a Trust, the assessee filed the return of income on 22.8.2017 declaring Nil income. During the impugned year, the assessee has received a sum of Rs.59,63,011/- along with some corpus receipts .Out of this, the assessee claimed an amount as application towards the objects of the trust and Rs.39,45,774/- towards capital expenses. The assessee accumulated an amount of Rs.8, 94,452under section 11(1) of the Income tax Act,1961. The assessee had obtained the certificate towards application of funds from a Chartered Accountant in Form 10B which the assessee filed separately on 28.8.2017.
Thereafter assessee’s return was processed by the Centralized Processing Centre (CPC) under Section 143(1) of the Income Tax Act. The CPC while processing the return denied the claim towards application of funds towards the objects of the trust and denied the deduction towards accumulation under section 11(1) of the Income tax Act, 1961 also. The reason for the denial was stated to be the delay in furnishing the Form 10B and that the same ought to have been filed on or before filing the return of income. Against this order assesee filed an appeal before ITAT.
Shreesh Kumar E. Hegde counsel for the assessee submits that the CBDT has issued a Circular No.10 (F.No.197/55/2018) dated 22.5.2019, condoning the delay in filing the audit report provided the delay in filing Form 10B for Assessment year 2016-17 and 2017-18 is condoned as the same is furnished before the due date under section 139 of the Income Tax Act 1961. The assessee same is filed before the due date for filing the return of income under section 139(1) of the Income Tax Act 1961
Gudimella VP Pavan Kumar counsel for the revenue submits that as per the above-mentioned circular, the Commissioner is authorized to condone the delay in filing of Form No.10B up to 365 days for the AY:2017-18 and subsequent assessment years. In the present case, the assessee did not mention anything about the condonation petition in its written -submission.
After considering the contentions of the both parties the division bench of ITAT comprising N.V. Vasudevan, Vice President And Padmavathy S (Accountant member) allowed the appeal filed by the assessee and observed that the delay is condoned by the circular and that there is no requirement to file condonation application therefore , assessee’s case is covered under para 4(i) of the CBDT Circular (supra) whereby the delay in filing Form 10B is condoned.
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